15.07.202400:26 Forex-elemzések és áttekintések: Key events on July 15: fundamental analysis for beginners

Analysis of macroeconomic reports:

There are few macroeconomic events scheduled for Monday. We can only highlight the Eurozone industrial production report, but everyone knows that this is secondary of importance. It might provoke a small market reaction, and the currency pair may slightly fall towards the lower boundary of the ascending channel. However, we do not yet see any reasons to end the upward trend on Monday. Take note that the channel is merely a guide for the pair's movement; it is not obliged to stay within it constantly.

Analysis of fundamental events:

Among the fundamental events, we can highlight Federal Reserve Chair Jerome Powell's speech. We do not expect an immediate market reaction to his new address, but if the market finds even the slightest hint of a possible rate cut "sometime in the future" in his speech, that would be enough for the dollar to fall further. Overall, we still believe that the monetary policies of the European Central Bank and the Bank of England (and their prospects) argue more in favor of the euro and pound falling. However, the market currently holds a different opinion, or perhaps it is driving both pairs higher so it can sell it at a better price.

General conclusions:

On Monday, only two events can potentially trigger a market reaction. We do not expect much from the Eurozone industrial production report, but Powell's speech might bring surprises. And even if Powell's speech contains no absolutely resonant theses, the market might "imagine" them. Therefore, there's a possibility that the dollar could fall on Monday.

Basic rules of a trading system:

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

How to read charts:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.